NCD - partial year this year, and previous over two years old. What happens?

Tunstallstoven

Hi all

Seriously scratching my head on this one!  And not getting consistent advice from insurers.  So wondered if any of the knowledgeable folk here can put me right please....  

I had insurance in my name which expired Dec.2022.  9 years NCD at the end.  

I took out a new policy with RAC in Oct.2024.  All good with the 9 years NCD. 

We now have a new car and other changes to make to the policy.  The price has gone up substantially with RAC.  We wouldn't be able to amend the existing policy, so we'd have to take out a new policy with a different underwriter.

If I stay, RAC tell me my 9 years NCD will still be valid.  I'm surprised seeing as my existing policy is in effect cancelled and a new one taken out.  I'm not 100% confident they are right, but would be good if they are - for future years.

If I cancel and leave, what happens to my NCD?  I presumed I would not get any from RAC as it was not a full year.  If that were the case, would it revert to me last having insurance/NCD in Dec. 2022.  That would then put it over two years ago and severely restrict who will accept the NCD (Admiral seem to be the only ones). 

Someone at Adrian Flux just now said they think that the 9 years NCD would be applicable, and so quoted me as such.  Again, I'm not feeling convinced.  I guess I foresee a time with them or another insurer where they ask for proof of NCD, RAC won't give me any as I didn't complete the year, so I give them my proof from before that, and that is dated Dec.2022.  

Sorry if that's not explained concisely!  Had a late night trying to figure out what to do and stressing about it all! 

Any help much appreciated.  Many thanks 
    

DullGreyGuy

There are no industry rules or regulations surrounding NCD, each firm sets its own rules. There are some common approaches and there are others who intentionally do things differently. It's then up to each company to decide how they want to react when one of their competitors does something novel. 

For example, DLG introduced Named Driver NCD (NDNCD) with the idea it would create lock in, the renewal would say the policyholder has 5 years NCD and bob the named driver has 3 years NDNCD in the hope that when Bob wants to buy his own insurance DLG would allow him to use his 3 years NDNCD so they'd stay in the group. Initially it worked, people would call Aviva or Admiral and they'd say they dont recognise NDNCD so a quote with them is with 0 NCD. From memory it was then Hastings Direct who first also said they'd recognise NDNCD and exchange it for NCD for a new business quote with them. 

If RAC are saying they'll continue to honour your NCD if you cancel and renew because the current insurer won't accept your current vehicle there is no reason not to believe them and its probably not a bad idea to regularise your NCD. 

What happens if you cancel and go elsewhere? That depends very much on RAC's policy... some insurers will just give you a new NCD certificate thus resetting the 2 year limit but others will return the proof you give them meaning you're over 2 years old and limited to Admiral or goodwill from another firm. Many firms have a switch point, the last time I worked in Motor we switched from returning your proof to issuing new proof at 7 months into the policy. 

Aretnap

Ultimately your NCD is whatever your last insurer says that it is. It's a marketing gimmick which can be applied slightly differently by different insurers - not something which is governed by rules handed down from above on tablets of stone.

Check with the RAC that they will give you a new proof of NCD when you cancel the policy. They won't add a year to what you had given that you didn't have the policy for a full year, but they should still give you a new proof of NCD letter which says "9 years, last used March 2025" or something to that effect. You can then show that to other insurance if they ask for proof of NCD.

If you'd cancelled after only a week or two then I think some insurers might not give you a new proof of NCD and just return your old one, but after six months they should really give you a new proof, and if the RAC have told you that it's still valid it sounds like that's their policy.

Tunstallstoven

Fantastically helpful answer!  And explains why I'm getting different answers from different insurers!  

Here's the thing...  RAC are saying it will carry over.  Adrian Flux are saying the partial year/cancelled year will count.  But for both firms the underwriter would be Aviva.  I've been chatting to Aviva, and they are saying they would not recognise a NCD from a partial year / cancelled mid-term policy.  As underwriter, does what they say supersede what the company I actually have the insurance with says?  

In the live chat, Aviva said that as the NCD has not been used in the last 2 years it becomes invalid.  To which I replied, "OK, but it was used. Just not for a full year. From what I'm reading, whether that partial year counts or not is largely discretionary. If that's the case, who decides? Do RAC decide, insomuch as they are willing to provide proof of NCD? Or do you decide, insomuch as whether you are willing to accept that proof?"  

Tunstallstoven

Crossed posts with you Aretnap.  Thanks for your additional comments.  That all makes sense and answers some of my questions.  I'll get in touch with RAC now and see what they say and what they'll give me.  

I'm naturally cynical...  So one more question please.  If RAC tell me that yes, they will give me a proof of 9 years NCD even if I cancel, but then when I later ask for it I don't get it and am told I was advised incorrectly.  Wold that just be bad luck?  Or could I insist based on being told wrong?  It is partly cynical and over-worrying, but to be fair it would not be the first time I'm told something on the phone/over live chat, just for the goalposts to move when it comes to the crunch...

Many thanks

DullGreyGuy

Tunstallstoven said:

Fantastically helpful answer!  And explains why I'm getting different answers from different insurers!  

Here's the thing...  RAC are saying it will carry over.  Adrian Flux are saying the partial year/cancelled year will count.  But for both firms the underwriter would be Aviva.  I've been chatting to Aviva, and they are saying they would not recognise a NCD from a partial year / cancelled mid-term policy.  As underwriter, does what they say supersede what the company I actually have the insurance with says?  

In the live chat, Aviva said that as the NCD has not been used in the last 2 years it becomes invalid.  To which I replied, "OK, but it was used. Just not for a full year. From what I'm reading, whether that partial year counts or not is largely discretionary. If that's the case, who decides? Do RAC decide, insomuch as they are willing to provide proof of NCD? Or do you decide, insomuch as whether you are willing to accept that proof?"  

It depends on the relationship between the insurer and the intermediary. In some cases the intermediary is just selling off the shelf products from a variety of different insurers, their role is purely in sales and service and underwriting, any decisions etc sit with the insurer. 

At the other extreme you have intermediaries known as MGAs or brokers with a lineslip where the insurer is not involved whatsoever other than being the company providing the capital to the book of business and they told once a quarter about what's happened in terms of policies sold, premiums and claims paid etc. These businesses can have full pricing control, T&C creation etc or at most bound by certain constraints (eg geographical territory, maximum limits, requirement to exclude war etc)

There is a long spectrum between the two extremes and companies can sit anywhere on there. RAC, who's certainly not just selling off the shelf products, may well have the discretion to set their NCD policy and this can go against what Aviva would do on their direct business. This is intended to be some of the interest of offering your pen to others who may do things differently, have different tech or different ideas and for the intermediary it avoids needing to raise the capital and all the overheads of running an actual insurance company regulated by the PRA. 

Tunstallstoven

Very helpful and very insightful.  Learning lots today about insurance.  

I think I'll go back to RAC and see what proof they will give me RE my NCD if I leave, and whether they'll rubber stamp me as 9 years NCD as of March 2025.  The policy is around 5 months in.  Whatever they tell me I'll just have to take on good faith and hope it is correct.  Fingers crossed!  If they do, at least I can then get whole market quotes.  

If not, I guess I'll be sticking with them for another year...  Or going with Admiral...

Or....  Does anyone know any other insurers who accept NCD from a policy which expired over two years ago?  

Great help - thank you very much

DullGreyGuy

Tunstallstoven said:

Very helpful and very insightful.  Learning lots today about insurance.  

We haven't yet touched on the dark art of reinsurance... insurance insurers buy against the risks they are assuming by selling insurance  

Tunstallstoven said:

Or....  Does anyone know any other insurers who accept NCD from a policy which expired over two years ago?  

Coop used to when they were an insurer and not a broker but that all changed and then Admiral started accepting it.  For direct insurers they are the only one I am aware of but there are many MGAs, wholesale brokers etc out there who may be doing things a bit differently and similarly some that may give staff some discretion. No way would I attest to them being the only one but no big name jumps to memory. 

XRS200

You are massively overcomplicating this.  You had 9 years in Oct 2024.  You still have 9 years.

Tunstallstoven

XRS200 said:

You are massively overcomplicating this.  You had 9 years in Oct 2024.  You still have 9 years.

I hope you're right.  That would be great.  But it is not what I am being told or what I'm reading when I research it, including it the above conversation.  EG:

DullGreyGuy said:

What happens if you cancel and go elsewhere? That depends very much on RAC's policy... some insurers will just give you a new NCD certificate thus resetting the 2 year limit but others will return the proof you give them meaning you're over 2 years old and limited to Admiral or goodwill from another firm. 

  

XRS200

Am i reading it right that RAC and Adrian Flux have both said you have 9 years?